John Player & Sons’ newly filed financial statements show that the company achieved strong financial performance despite headwinds from a shrinking Irish tobacco market and rising costs.
Results for the 12 months to the end of September showed pre-tax profits rose by almost 15% to €15.7m, despite a 4% rise in revenue to €55.5m. Masu.
The increase in sales and bottom line came despite an 18% jump in manufacturing costs during the financial year.
The size of Ireland’s legal cigarette market shrank by 14% in the period, following a 15% decline in the previous year.
“Adding to this challenge, consumers are becoming increasingly brand-focused, resulting in a shrinking profit pool for the overall tobacco market,” the directors wrote in their financial statements.
The primary risks facing the company include decreased market demand for its products, control of its cost base, and general economic conditions.
“The company’s manufacturing costs increased by 18% and supply chain costs also increased,” the directors said.
“In 2024, the company, along with other industry players, may have to contribute to the costs of establishing and funding an Extended Producer Responsibility Scheme for e-cigarette products.”
They expect “significant regulatory changes” to be implemented in the coming years in both the tobacco and e-cigarette categories. “While we anticipate that these developments may impact our costs and profitability in the future, they will not be to a level that would impact our going concern rating,” the directors said. added.
The average price of a pack of 20 cigarettes in Ireland is now €16.75, after Finance Minister Michael McGrath added 75 cents to excise duty in the last budget.
Electronic cigarettes, or VAPEs, are extremely popular among people under the age of 18, despite the threat of nicotine addiction.
The ban on sales to under-18s only came into effect at the end of December.
VAPE is not subject to sales tax, only value-added tax.
But the government has said it intends to introduce a tax on such products in the 2025 budget.